The price of Queensland metallurgical coal dropped below US$115 per tonne in September, a long way short of the US$300/t records reached in 2011.

BMA asset president Lucas Dow said the joint venture had to act to guarantee the long-term viability of the business. “BMA will continue to work with
employees and contractors throughout the process and ensure everyone is treated fairly and with respect,” he said.

“We will also keep our community stakeholders informed throughout the process.

“BMA has to redouble its efforts to improve the cost base of the business.” BMA, a 50-50 joint venture between BHP and Mitsubishi, is the largest private
employer in Central Queensland, with more than 10,000 employees and contractors across the region.

Isaac Regional Council mayor Anne Baker, whose region takes in several BMA mines, said the news was devastating for workers, their families and friends, schools, and local businesses.

“This is the biggest hit to us this year; it’s heart wrenching to see so many community members directly affected,” she said. “It will touch every aspect of our communities and the economic impact will be felt far and wide across the region.” Central Queensland was dealt another blow within the week, as Brazilian giant Vale and Japan’s Sumitomo Corporation announced the closure of their Isaac Plains mine near Moranbah.

The thermal and metallurgical coal mine, believed to employ about 300 people, will go into care and maintenance from January next year.
In a statement, Vale said the operation was “not economically feasible under current market conditions”.

“The decision is consistent with Vale’s strategy to focus on discipline in capital allocation and maximising value for its shareholders,” the company said.
Rio Tinto also announced it was shedding up to 100 jobs at its Kestrel coal mine in the Central Highlands.

Queensland Resources Council chief executive Michael Roche said further closures could be expected due to oversupply in the global coal market.
“What [the Isaac Plains] closure indicates is that there are some mines that are struggling, even with the cost cutting they’re undertaking, to get back in the black,” he said.

“We will see mines that can’t make a go of it, that can’t profit, close.” However Mr Roche said coal’s future remained strong.
“We will work through that oversupply over the next year or so…we have record levels of coal production and coal export in Queensland, and that’s despite some of these job losses and despite some of these mine closures,” he said.

“There are many other mines that are able to make a profit and are boosting production.”